Gold price skyrocketing; Buy Sovereign Gold Bonds, they will even earn income for you

If you are planning to invest some money and generate good profit for yourself, the first thing that comes to mind is Gold. For a variety of reasons, gold investment is always on top of investors' mind. So, if you are thinking whether this is the right time to invest in gold, then know the answer here - YES, it is! The biggest advantage of having an investment in gold is that it gives stability to your portfolio in case if other instruments are experiencing volatility. In other words, gold is a safe commodity to invest in. The price of gold in Delhi's physical markets is around Rs 46000. According to the commodity experts, gold price in Indian commodity market is expected to hit Rs 50,000 per 10 gm due to the Coronavirus fears making the yellow metal an investment haven for those who want safety for their money.

Zee Business' Swati Kumari gives you the full insight into gold investment in times of coronavirus. 

First of all, physical gold buying is not ideal. So, if you are planning to invest in gold, then the best option before you is SGB or Sovereign Gold Bonds. There are no hassles with this gold instrument unlike the physical gold. SGB is best suited in terms of security as it is issued by the government. The third and equally important aspect is that it gives you income unlike physical gold. In fact, buying physical gold, especially jewellery, is a very costly exercise and will not really generate great profits.

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When can you buy SGBs? The government will be issuing SGB in six tranches. The first tranche (2020-21 Series I) will be open for subscription between April 20-24 while the issuance date will be 28 April. Likewise, 2020-21 Series II, 2020-21 Series III, 2020-21 Series IV and 2020-21 Series V will come in subsequent months with the last 2020-21 Series VI coming in September. 

This means, April onward, you will have an option to invest in this instrument.

The minimum permissible investment will be 1 gram of gold while the maximum limit is of subscription shall be 4 Kg for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal (April-March) notified by the Government from time to time.

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SGB are restricted for sale to resident individuals, HUFs, Trusts, Universities and Charitable Institutions. 

The Bonds will be denominated in multiples of gram(s) of gold with a basic unit of 1 gram. The tenor of the Bond will be for a period of 8 years with exit option after 5th year to be exercised on the interest payment  dates.

Investors will get a discount of Rs 50 per gram if SGB are bought online. You can buy SGB from any commercial bank, Stock Holding Corporation of India Limited (SHCIL), post office and all the recognised stock exchanges.

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The interest rate is 2.5 per cent payable semi annually i.e. two times in a year. The documents that you require are normal KYC (Know Your Customer Documents) like your voter ID card, Aadhaar etc. PAN number is mandatory for every application.